In the context of compensation, which of the following statements is true of internal equity?

A) It occurs when lower-level employees in a firm receive the same incentives as the top executives.
B) Overpaying individuals for the value of their contributions can effectively solve internal equity issues.
C) Problems with internal equity can result in conflict, feelings of mistrust, and low morale.
D) Much of the information concerning internal equity comes from a pay survey.

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sarah geddes · Accepted Answer

Final Answer : C, Explanation :  Internal equity refers to the fairness of pay within an organization, comparing the pay rates of employees within the same company. When internal equity is perceived as lacking, it can indeed lead to conflict, feelings of mistrust, and low morale among employees. This is because employees may feel undervalued or unfairly compensated in comparison to their colleagues.

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